HP Could Fire 25,000 In Cost-Cutting Move

A logo of HP is seen outside Hewlett-Packard Belgian headquarters in Diegem, near Brussels, January 12, 2010 Photo: Reuters

Shares of Hewlett-Packard Co. (NYSE: HPQ), the No. 1 computer maker, were largely unaffected by a report it would fire as many as 25,000 employees as part of cost-cutting measures.

HP shares rose 3 cents to close at $22.06. HP shares have lost 13 percent in 2012 and 3 percent since new CEO Margaret Whitman was recruited in September.

HP, in Palo Alto, Calif., is scheduled to report second-quarter results next Wednesday. A report by Bloomberg News said Whitman planned to fire as many as 8 percent of its total payroll. HP had no comment and has not scheduled any announcements.

Analysts expect HP to report net income of $1.82 billion, or 91 cents a share, down almost 27 percent from last year's 2.72 billion, or $1.24 a share. Revenue is expected to fall about 5 percent, to $29.9 billion. By contrast, its smaller rival, International Business Machines Corp. (NYSE: IBM), has been reporting steadily increasing earnings and revenue, bolstered largely by software and services.

Whitman, the defeated Republican candidate in 2010 for governor of California, had been CEO of auctioneer eBay Inc. (Nasdaq: EBAY), until she quit to run for office.

She promised to restore some of HP's stature, lost under the disastrous management of Leo Apotheker, who was fired, as well as an expenses scandal by his predecessor, Mark Hurd, who was forced out, in 2010.

HP, which reported reasonable results for the first quarter ended in January, has undergone some shifts under Whitman, who decided to keep the PC unit, the world's largest, but also made changes in its Imaging and Printing division, also the world's largest, by announcing the exit of long-time executive vice president, Vyomesh Joshi.

HP last made major employee cuts when Hurd was brought in as CEO in 2005 from NCR Corp. (NYSE: NCR) after the ouster of Carleton (Carly) Fiorina.